Using a combination of cash and gift cards, Bloomingdale’s agreed to pay a total of $1.4 million to settle a Telephone Consumer Protection Act (TCPA) suit arising over text messages.
In his New Jersey federal complaint, Eli Ashkenazi alleged the national retailer sent unsolicited spam ads to members of the store’s “Loyallist Program” without warning participants they would receive the text messages.
While still denying any liability, Bloomingdale’s agreed to settle the case with a class of consumers defined as “all persons who, upon signing up for Bloomingdale’s customer loyalty program known as ‘Loyallist’ between August 24, 2014 and May 16, 2015, were sent a successfully transmitted text message … reading ‘Bloomingdale’s Promo Alerts: Reply Y now to confirm you want texts! Reply HELP for help. 1 msg/week. MSG&Data Rates May Apply.’”
The national retailer will establish a settlement fund totaling $1.4 million comprising two parts: $750,000 in cash and $650,000 in vouchers will be paid out. Each class member will be permitted to submit a single claim form, with a choice to receive either a $25 payment by check or a $50 voucher redeemable toward products sold by the defendant.
Only one claim form will be honored per class member, regardless of how many texts were received. Should the dollar value of valid claims exceed the amount available in either the cash or voucher totals, payments will be reduced on a pro rata basis.
The rest of the fund will cover class counsel fees of $420,000 and expenses of $30,000, as well as a $10,000 class representative award for Ashkenazi. Should there be any money remaining in the cash settlement fund after payment of all these items, the money will be distributed to the Community Food Bank of New Jersey.
U.S. District Judge Peter G. Sheridan granted preliminary approval of the deal, with a hearing on final approval set for December 2018.
To read the settlement agreement in Ashkenazi v. Bloomingdale’s, Inc., click here.
To read the order granting preliminary approval of the deal, click here.
Why it matters: This case is a cautionary tale about the expensive consequences of missteps in texting even a company’s most “loyal” customer base. By failing to obtain consent to send the initial text message requesting consent to receive marketing messages, Bloomingdale’s will now have to shell out a total of $1.4 million. Despite recent case law wins for defendants generally, the TCPA remains a potentially very costly minefield.